Moutai Falls Most in Month on Credit Suisse Cut: Shanghai Mover

By Bloomberg News -
Jan 27, 2013

Kweichow Moutai Co. (600519), China’s biggest
liquor maker by market value, fell the most in a month in
Shanghai stock trading after Credit Suisse Group AG cut its
rating and forecast a drop in volume growth this year.

Vincent Chan, an analyst at Credit Suisse, downgraded
Moutai’s stock to neutral from outperform and estimated a 3
percent decline in volume growth for its “high-end” liquor
products in 2013, according to a report dated today.

Chan had an outperform rating on Moutai stock dating back
to at least September 2011, data compiled by Bloomberg show. A
neutral rating means that the stock’s total return is expected
to be in line with the benchmark index over the next 12 months.

Moutai on Jan. 24 estimated 2012 net income will rise about
50 percent, trailing estimates from brokerages such as Fortune
CLSA Securities Ltd. Credit Suisse said in the report that this
“disappointment is probably due to less sales volume reported
from Moutai’s self-operated stores and is a sign that the
company has started giving in to weakening fundamentals.”

Volume growth this year from direct government and military
purchases may slide as much as 40 percent from 2012, Chan wrote
in the report. China’s new party leadership pledged last month
to reduce lavish receptions and live more frugally.